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THE INTERNATIONAL JOURNAL OF

BUSINESS & MANAGEMENT
Effect of ISO 900-2008 QMS, Total Quality Management and Work
Environment on Job Satisfaction and Employee Performance at Pt
Mount Dreams Indonesia in Gresik
Mahmudah Enny W.
Doctoral Economic Faculty, Bhayangkara University of Surabaya, Indonesia
Abstract:
This study took the title Influence of ISO 9001-2008 QMS, Total Quality Management and work environment on job
satisfaction and employee performance at PT Mount Dreams Indonesia in Gresik. The sample in this study is 175
respondents who are employees of the staff of PT Mount Dreams Indonesia in Gresik. Sampling technique in this study uses
a questionnaire distributed to the respondents. This study uses a method of calculating SEM (structure equation modeling)
with a program of AMOS (moment structure analysis). The relationship of these variables to five is causality. Model of the
relationship the variables of SMM ISO 9001-2008 produces no significant positive effect on job satisfaction, while total
quality management and work environment have a positive and significant impact on employee job satisfaction. Total quality
management does not have a significant positive effect on the performance of the employee but for variable ISO 2001-2008
QMS and work environment has a positive and significant impact on employee performance. For further research to be
conducted a similar study is expected to take a sample with tenure, expanding not only in research at PT Mount Dreams
Indonesia, but in some places that are relevant to this study.
Keywords: Total quality, management, employee performance, PT Mount Dreams Indonesia k

1. Introduction
PT Mount Dream Indonesia is one of the corporations in the sector of paper industry that is developing vastly several years lately.
The existing high-level competition, however, makes the corporation must have different or separate advantage that can be used as the
corporations competitiveness. Moreover, fluctuation in corporations performance also creates a separate problem for the corporation,
where employees performance that has not reached maximal level, causes their output cannot meet the corporations target. Every
corporation will always try to increase corporations performance by developing and boosting the employees performance. This is so
because employees as spearheads of the corporations operational activity. High performance of the employees can be influenced by
various factors, among other things, by employees work satisfaction, organizational culture, and implementation of Total Quality
Management (TQM).
PT Mount Dream Indonesia that wants to increase employees performance and working satisfaction tries for ameliorating to stabilize
and increase the corporations performance continuously. The existing organizational culture in PT Mount Dream Indonesia is not
strong enough to underlie, or to support, the employees in working. Individual work orientation of the employees indicates that control
nature, performance nature, correlation nature, and responsive nature are less felt by the employees. It tries to cope with it, among
other things, by way of applying and implementing the TQM, that be expected it can corporations performance and competitiveness
in the market. Implementation of the TQM is also carried out by the corporation comprehensively where TQM has reached bottom
line of the corporation, but the output is unsatisfactorily. The TQM is to manage total quality in doing business by way of: focusing on
consumer behavior, all employees involvement, and ameliorating continually product or service quality produced by the corporation,
human resources, process and organizational environment. Previous research has proved that implementation of the TQM effectively
influenced positively on employees performance. It means that increased implementation of the TQM will increase employees
performance, on the contrary, if implementation of the TQM is on the decrease, it consequently will decrease corporations
performance. Munizu (2011) concluded that increased or decreased level of quality performance or employees performance is
determined by variables of TQM consisting of : leadership, strategic planning, focus on consumer, information and analysis, people
management, and process management.
Working satisfaction of the employees is not maximal at PT Mount Dream Indonesia, there are many complaints made by employees
concerning their burden of work. Robbins (2001: 147) suggested that satisfied workers/employees will more productive than

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unsatisfied workers, i.e., working satisfaction will influence the performance of employee. Therefore, PT Mount Dream Indonesia in
Gresik has to consider employees satisfaction in order to increase their performance.
From the aforementioned exposition this research will examine what variables underlie employees satisfaction and performance in
viewpoint of implementation of SMM ISO 9001-2008, total quality management, and working environment. So in this research the
writer chooses the topic effect of SMM ISO 9001-2008, total quality management and working environment on employee work
satisfaction and performance at PT Mount Dream Indonesia in Gresik.
2. Method of Research
According to Sugiyono (2013), this research is called conclusive research since it aims to test hypothesis about correlation between
variables to be researched, where information is defined clearly, process of research is formal and structured, uses relatively large and
representative sample, and data analysis uses the technique of qualitative.
Based on opinions from Singarimbun dan Efendy (2000), this research is called survey research, that is, a research conducted by
taking samples from the population and use questionnaire as a means of collecting primary data. This research also can be said as a
research that can be conducted in large or small population, so it can be found relative event, correlation between variables socially
and psychologically.
Population is an area of generalization that consists of object or subject that has quality and characteristic specified in the research to
be examined and then the conclusion can be drawn (Sugiyono, 2013). Population of the research is staff and employees other than
workers of production at PT Mount Dream Indonesia in Gresik that consists of 175 employees.
Sample is part of the population that has the same characteristic as the population. Technique of sampling in the research uses
technique of probability sampling, i.e., technique that gives the same chances for every element (member) of population to be chosen
as sample member. There are various techniques of probability sampling: simple random sampling, proportionate stratified random
sampling, disproportionate stratified random, sampling area (cluster) sampling (Sugiyono, 2010:120). Sample is part or representative
of population to be researched (Suharsimi Arikunto, 2010:109). Respondents of the research comprises 175 employees of PT Mount
Dream Indonesia in Gresik, so it uses study of population or study of census, as suggested by Suharsimi Arikunto (2010;173) when
somebody wants to research all existing elements in the area of research, so it is research of population, and the study is also called
study of population or study of census.
3. Analysis and Discussion
3.1. Effect of SMM ISO 9001-2008 (X1) on Work Satisfaction (Y1)
Based on the result of testing the first hypothesis (table 5.18), variable coefficient of SMM ISO 9001-2008 (X1) applied by PT Mount
Dreams Indonesia in Gresik on work satisfaction (Y1) = 0,287 with p-value 0.082 higher than value ( = 0,05). The first hypothesis
states that SMM ISO 9001-2008 has a significant effect on work satisfaction at PT Mount Dreams Indonesia in Gresik is not true and
unacceptable. Path coefficient which is positive, theoretically effect correlation of SMM ISO 9001-2008 on work satisfaction is in the
same direction, that is if perception by employees towards SMM ISO 9001-2008 is better and better (positive), work satisfaction is
increasing. or high. Description of respondent perception (175 employees of PT Mount Dream Indonesia in Gresik) on employee
competence applied by the corporation indicates positive, i.e., 13 respondents said greatly agreed and 107 respondents said agreed
(Table .5.4) and supported by competence coefficient 0.610 with p value 0,000. Respondents perception of training applied by PT
Mount Dream Indonesia indicated positive, that is 22 respondents greatly agreed and 105 respondents agreed (Table 5.4) and
supported by coefficient value of training on SMM ISO 9001-2008 is 0,698 with p-value 0,000. Respondent perception on employee
attention indicates positive; 23 respondents greatly agreed and 113 respondents agreed (Table 5.4) and coefficient of employee
attention on SMM ISO 9001-2008 is 0,553 with p-value 0,000.
This study does not support the research conducted by Lukitaningrum and Purwanggono (2012) that said that application of quality
management system ISO 9001-2008 has positive and significant effect on work satisfaction and employee performance (case study at
PT Intech Anugerah Indonesia). This study indicates that SMM ISO has an insignificant positive effect on work satisfaction of the
employees. It can be said that application of SMM ISO 9001-2008 at PT Mount Dream Indonesia in Gresik has a weak or low effect
on work satisfaction; therefore management can carry out intensive approach in the implementation of SMM ISO. Because result of
questionnaire shows that the implementation of SMM ISO 9001-2008 is influenced by the focus on consumer.
3.2. Effect of TQM (X2) on Work Satisfaction (Y1)
Based on result of examination of second hypothesis (table 5.18), variable coefficient of Total Quality Management (X2) applied by
PT Mount Dream Indonesia in Gresik on work satisfaction (Y1) is 0,289 with p-value 0,011 lower than value (=0,05). Second
hypothesis states that total quality management has significant effect on work satisfaction at PT Mounts Dreams Indonesia in Gresik,
it is true and acceptable. Path coefficient which is positive, theoretically the correlation of effect of total quality management on work
satisfaction is in the same direction; if respondents perception on total quality management, applied by PT Mount Dreams Indonesia
in Gresik, is positive, so work satisfaction is increasing. Description of respondents perception (175 employees of PT Mount Dreams
Indonesia in Gresik) on commitment of management applied by PT Mount Dreams Indonesia in Gresik indicates positive, that is 38
respondents greatly agreed and 1000 respondents agreed (Table 5.5) and supported by coefficient value of management commitment
on total quality management is 0,693 and p-value is 0,000. Respondents perception on employee empowerment applied by PT mount

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Dreams Indonesia in Gresik shows positive; 29 respondents greatly agreed and 105 respondents agreed (Table 5.5) and supported by
coefficient value of employee empowerment on total quality management is 0.696 with p-value 0,000. Respondents perception on
continual amelioration applied by PT Mount Dream Indonesia in Gresik applied by PT Mount Dreams Indonesia indicates positive,;
25 respondents greatly agreed and 88 respondents agreed (Table 5.5) and supported by coefficient value of continual amelioration on
total quality management is 0,740 with p-value 0,000. Respondents perception on focus on consumer applied by PT Mount Dreams
Indonesia in Gresik shows positive; 45 respondents greatly agreed and 103 respondents agreed (Table 5.5) and supported by
coefficient value of focus on consumer on total quality management is 0,811 with p-value 0,000.
This study supports the research conducted by Misran Minizu (2005) who suggested that simultaneously or partially some critical
factors of TQM consisting of top management commitment, employee involvement, employee empowerment, and employee training
have significant effect on employee work satisfaction at PT Bosawa Berlian Motor Makasar. It can be said that variable of total quality
management has correlation on work satisfaction based on factors of work output, work quality, top management commitment,
employee involvement, employee empowerment, and employee training.
3.3. Effect of work Environment (X3) on Work Satisfaction (Y1)
Based on the test of the third hypothesis (table 5.18), coefficient of work environment (X3), applied by PT Mount Dreams Indonesia
in Gresik, on job satisfaction (Y1) is 0,366 with p-value 0,003 is higher than value (=0,05). The third hypothesis suggests that work
environment has significant effect on employee job satisfaction at PT Mount Dreams Indonesia in Gresik is true and acceptable. Path
coefficient is positive; theoretically influence of work environment on job satisfaction is in the same direction; if respondents
perception on work environment is positive, job satisfaction at PT Mount Dreams Indonesia in Gresik is increasing. Description of
respondents perception on coloration, applied by PT Mount Dreams Indonesia in Gresik, indicates positive; 35 respondents greatly
agreed and 98 respondents agreed (Table 5.8) and supported by coefficient value of coloration on work environment is 0.601 with pvalue 0,000. Respondents perception on cleanliness applied by PT Mount Dreams Indonesia in Gresik shows positive; 40 respondents
greatly agreed and 105 respondents agreed (Table 5.6) and supported by coefficient value of cleanliness on work environment is 0,601
with p-value 0,000. Respondents perception on lighting applied by PT Mount Dreams Indonesia in Gresik shows positive; 31
respondents greatly agreed and 100 respondents agreed (Table 5.6) and supported by value of the lighting coefficient in work
environment is 0,526 with p-value 0,000. Respondents perception on air circulation applied by PT Mount Dreams Indonesia in Gresik
indicates positive; 21 respondents greatly agreed and 96 respondents agreed (Table 5.6) and supported by coefficient value of air
circulation toward work environment is 0,531 with p-value 0,000. Respondents perception on music applied by PT Mount Dreams
Indonesia in Gresik shows positive; 29 respondents greatly agreed and 92 respondents agreed (Table 5.6), musical coefficient is o,682
with p value 0,000. Perception on noise at PT Mount Dreams Indonesia indicates positive; 20 respondents greatly agreed and 99
respondents agreed (Table 5.6) and noise coefficient is 0,546 with p value 0,000. Respondents perception on security shows positive;
30 respondents greatly agreed and 89 respondents agreed (Table 5.6) and coefficient for security guaranteed is 0,697 with p-value
0,000.
This study supports a theory suggested by Litwin and Stringer (2005) that authoritarian work environment or organizational climate
with centralization of decision making, while worker behavior is determined by regulation and standard procedure, productivity and
work satisfaction will be low.
3.4. Effect of SMM ISO 9001-2008 (X1) on Employee Performance (Y2)
Based on the test of fourth hypothesis (table 1.18), variable coefficient of SMM ISO 9001-2008 (X1) applied by PT Mount Dreams
Indonesia in Gresik on employee performance (Y2) is 0,338 with p-value 0,010 lower than value (=0,05). The fourth hypothesis
states that SMM ISO 9001-2008 has significant effect on employee performance, is true and acceptable. Path coefficient which is
positive indicates that theoretically correlation of effect of SMM ISO 9001-2008 on employee performance is in the same direction; if
employee perception on SMM ISO 9001-2008 is positive, then employee performance is increasing.
This study supports the research conducted by Angga Perwira Utama (2012) that there is direct significant effect between quality
management system ISO 9001-2008 on job satisfaction.
3.5. Effect of Total Quality Management (X2) on Employee Performance (Y2)
Based on test of the sixth hypothesis (table 5.18), coefficient of total quality management (X2) applied by PT Mount Dreams
Indonesia on employee performance (Y1) is 0,105 with p value 0,176 higher than value (=0,05). The sixth hypothesis suggests that
total quality management has significant effect on employee performance at PT Mount Dreams Indonesia in Gresik, is not true and
unacceptable. Path coefficient is positive; theoretically effect of total quality management on employee performance is the same
direction; if employee perception on total quality management applied by PT Mount Dreams Indonesia is positive, employee
performance will be increasing.
Effect of work environment (X3) on Employee Performance (Y2)
Based on test of the sixth hypothesis (table 5.18), coefficient of work environment (X3) applied by PT Mount Dreams Indonesia in
Gresik on employee performance (Y2) is 0,258 and p-value 0,009 lower than value (=0,05). The sixth hypothesis states that work
environment has significant effect on employee performance, is true and acceptable. Path coefficient is positive indicates that
theoretically effect of work environment on employee performance is in the same direction; if employee perception on work
environment is positive, employee performance will be increasing.

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Effect of job Satisfaction (Y1) on Employee Performance (Y2)

Based on test of the seventh hypothesis (table 5.18), coefficient of employee job satisfaction (Y1) at PT Mount Dreams Indonesia on
employee performance (Y2) is 0,346 with p-value 0,006 is lower than value (=0,05). The seventh hypothesis suggests that job
satisfaction has significant effect on employee performance, is true and acceptable. Path coefficient is positive indicates that
theoretically effect of job satisfaction on employee performance is in the same direction; if employee perception on job perception is
positive or better, then employee performance will be higher.
Result in this research is that employee performance is influenced by job satisfaction. The higher job satisfaction will increase
employee performance. Based on the result of the research, the most dominant variable on job satisfaction is variable of work
environment.
Employee performance is directly influenced by job satisfaction and work environment, this is in accordance with test of hypothesis in
standardized Direct Effect (Group number 1 Default Model) in appendix 7 that direct effect of work environment on employee
performance is 0,366 with p-value 0,003 is lower than (=0,05) and coefficient of job satisfaction on employee performance is 0,346
with p-value 0,006 is lower than (=0,05). Employee performance is not influenced directly by independent variable in this research
consisting of variables of SMM ISO 9001-2008 (X1), total quality management (X2), work environment (X3), but by way of job
satisfaction; employee performance will be maximal if employee expectation is satisfied.
4. Conclusion
1. SMM ISO 9001-2008 (X1) applied by PT Mount Dreams Indonesia in Gresik has positive effect but insignificant on job
satisfaction (Y1). This means SMM ISO 9001-2008, in this case are employee competence, training, assessment of activity
effectiveness, employee attention and archive maintenance applied by PT Mount Dreams Indonesia in Gresik are
insignificant to increase job satisfaction. The result of questionnaire shows that assessment of work effectiveness has the
highest level between five indicators from variable of SMM ISO 9001-2008 and employee competence has the lowest level.
2. Total Quality Management/TQM (X2) applied by PT Mount Dreams Indonesia in Gresik has positive and significant effect
on job satisfaction (Y1). This means TQM, in this case are management commitment to employee and consumer, employee
maximal empowerment, continual amelioration and focus on consumer will be able to increase quality of management and
work, so that in the implementation can fulfill employee expectation. Increasing satisfaction of the consumer can increase
work quality of the employee as a whole.
3. Work environment (X3) applied by PT Mount Dreams Indonesia in Gresik has positive and significant effect on job
satisfaction (Y1). This means the applied and standardized work environment, in this case are comfortable wall coloration,
fine cleanliness, good lighting, maximal air circulation, music that capable of raising work inspiration, undisturbing noise and
guarantee for security have made the employee of PT Mount Dreams Indonesia in Gresik feel satisfied. So work environment
can increase satisfaction; it can fulfill employee need and want (expectation).
4. SMM ISO 9001-2008 (X1) applied by PT Mount Dreams Indonesia in Gresik has positive and significant effect on employee
performance (Y2). This means SMM ISO 9001-2008 standardized by management, in this case are employee competence,
training, assessment of work effectiveness, employee attention and archive maintenance can increase employee performance
continually.
5. Total Quality Management/TQM (X2) applied by PT Mount Dreams Indonesia in Gresik has positive effect but insignificant
on employee performance (X2). This means TQM, in this case are management commitment to employee and consumer,
employee maximal empowerment, continual amelioration and focus on consumer can not increase employee performance
significantly.
6. Work environment (X3) applied by PT Mount Dreams Indonesia in Gresik has positive and significant effect on employee
performance (Y2). Benefit can be obtained by the employee from comfortable work environment, in this case are
comfortable wall coloration, fine cleanliness, good lighting, maximal air circulation, music that capable of raising work
inspiration, undisturbing noise and guarantee for security make the employee can carry out their responsibility well.
7. Job satisfaction (Y1) of the employees at PT Mount Dreams Indonesia in Gresik has positive and significant effect on
employee performance (Y2). This means that employee job satisfaction can increase employee performance.
8. Employee performance (Y2) at PT Mount Dreams Indonesia in Gresik is not directly influenced by variable of total quality
management, but it can increase performance through job satisfaction. And SMM ISO 9001-2008 (X1) can not indirectly
fulfill employee job satisfaction, but directly can influence employee performance. Work environment directly can increase
employee job satisfaction and performance. Management should, therefore, consider first employee job satisfaction to
increase employee performance.
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